Applied Materials Hit Its Highest Margins in 25 Years. Here’s Where Shares Could Go in 2026.

Key Takeaways for Applied Materials Stock as of July 2026

• Of 39 analysts covering Applied Materials stock, 32 rate it a buy or outperform against just 1 underperform, with a mean target of $619: only 4% above the current $596.
• TIKR’s mid-case model values AMAT at $867 by October 2030, a 46% total return from today’s price, or 9% annualized.
• Trading at 32% EBIT margins that the Street still models rising to 36% by mid-2027, Applied Materials stock looks undervalued relative to the operating leverage this AI spending cycle is producing.
• Following a Q2 EBIT beat of 6% over consensus, management raised calendar 2026 systems growth guidance from 20% to 30%-plus and signaled a similar profile extending into 2027.

The Street’s mean target barely clears Applied Materials stock’s current price. See if TIKR’s model sees more upside: Analyze AMAT stock on TIKR for free →

Applied Materials Stock Delivers Record Margins as AI Shifts Spending Into Its Strongest Segments

Applied Materials (AMAT) posted record Q2 fiscal 2026 revenue of $7.91 billion, up 11% year over year, and beat Street EBIT estimates by 6% with $2.54 billion in operating income.

Gross margins crossed 50% at the company level for the first time in over 25 years, while the Semiconductor Systems segment hit 54.8%.

That margin expansion reflects a deliberate portfolio shift: leading-edge foundry-logic, DRAM, and advanced packaging now account for more than 80% of year-over-year WFE spending growth, and those are the segments where AMAT holds #1 process equipment share.

CFO Brice Hill framed the structural driver on the Q2 earnings call: “Our non-GAAP gross margin has increased 800 basis points since Gary became CEO in 2013. It is now crossing 50% at the company level and approaching 55% in Semiconductor Systems.”

Management raised its calendar 2026 systems growth outlook from 20% to over 30%, citing incremental customer orders as fab operators find creative ways to expand cleanroom capacity.

Q3 guidance came in at $8.95 billion in revenue (up 23% YoY) and $3.36 in non-GAAP EPS (up 36% YoY), with gross margin expected to tick higher to 50.1%.

Applied Materials stock slipped alongside the broader chip sector in mid-July on US-Iran geopolitical tensions, but multiple analysts lifted targets in the weeks prior: TD Cowen to $700, Mizuho to $650, BofA to $720, and B. Riley to $790.

Applied Materials just guided for 23% YoY revenue growth next quarter. See how EBIT margins are tracking: Explore AMAT’s financials on TIKR for free →

32 of 39 Analysts Rate Applied Materials Stock a Buy With a $619 Mean Target

Wall Street’s consensus on Applied Materials stock is overwhelmingly bullish: 28 analysts rate it a buy, 4 an outperform, and 6 a hold, with just 1 underperform and no sell ratings. The mean price target of $619 sits only 4% above the current $596, though the high-end target of $900 reflects the widening spread among the 35 analysts publishing targets.

TD Cowen’s recent raise to $700 and B. Riley’s $790 target both anchor their cases in AI-driven WFE acceleration and AMAT’s gate-all-around positioning.

Wall Street Expects Applied Materials Stock’s EBIT to Grow 32% by Mid-2027

Applied Materials delivered $2.54 billion in EBIT for Q2 fiscal 2026, beating the Street’s $2.39 billion estimate by 6% and expanding operating margins to 32.1%, up 140 basis points year over year.

Consensus EBIT estimates step higher from here: $3.03 billion for Q3 (the July quarter), $3.23 billion by October, and $3.40 billion by January 2027, each reflecting the systems growth ramp management outlined.

By mid-2027, analysts project EBIT reaching $3.70 billion at a 35.5% margin, a trajectory that prices in continued portfolio enrichment from gate-all-around tools, DRAM periphery upgrades, and advanced packaging revenue growing over 50% this calendar year.

Whether that margin trajectory holds depends on AMAT’s supply chain scaling fast enough to meet 8-quarter rolling customer forecasts that management says extend the growth outlook well into 2028.

TIKR Values Applied Materials Stock at $867, Pricing In Sustained AI-Driven Margin Expansion

TIKR’s mid-case model values Applied Materials at $867 by October 2030, implying 46% total return from the current price of $596, or 9% annualized over 4.3 years.

That annualized rate sits above the broader semiconductor equipment sector’s historical return profile, reflecting AMAT’s position as the #1 process equipment supplier in the three fastest-growing WFE categories.

The model captures what the Street’s tight $619 mean target has not fully absorbed: EBIT margins expanding from 32% toward 36% as AMAT’s newly doubled manufacturing capacity fills with higher-value gate-all-around, DRAM, and packaging tools, each carrying richer gross margins than the prior generation.

TIKR’s model sees 46% total return for Applied Materials stock. Build your own model: Value AMAT stock on TIKR for free →

Should You Invest in Applied Materials?

The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.

Pull up Applied Materials stock and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.

You can build a free watchlist to track Applied Materials alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!